7-Eleven Owner Rejects $38 Billion Buyout Offer From Canadian Rival

A sign outside a 7-Eleven store is seen in Glendale, Calif., July 11, 2022. Robyn Beck/AFP via Getty Images

The operator of the 7-Eleven convenience store chain has turned down a $38.5 billion buyout offer from Canada’s Alimentation Couche-Tard, citing that the bid was inadequate in value.

Seven & i Holdings, the parent company of 7-Eleven, said that Couche-Tard’s $14.86-per-share cash deal “grossly” undervalued the company and was not in the best interest of its shareholders.

The Japan-based company said that even if Couche-Tard were to increase the offer “very significantly” in value, there would still be no certainty in closing the deal.

It stated that the proposal did not “adequately acknowledge the multiple and significant challenges such a transaction would face from U.S. competition law enforcement agencies in the current regulatory environment.”

Stephen Dacus, chair of Seven & i’s board, said in the letter to Couche-Tard that the company remains open to negotiations for a proposal that “fully recognizes our standalone intrinsic value.”

“However, we do not believe, for several critical reasons, that the proposal you have put forward provides a basis for us to engage in substantive discussions regarding a potential transaction,” he stated.

Dacus said that Couche-Tard’s offer was “opportunistically timed” and showed no indication that the operator of Circle-K convenience stores will be ready to take all necessary action to obtain regulatory clearance.

Couche-Tard did not immediately respond to a request for comment from The Epoch Times.

Seven & i’s shares swung between gains and losses before closing 1.43 percent lower at 2,133.5 yen ($14.99) on Friday, slightly above the value of the $14.86 per share proposal. The stock traded at 1,761 yen ($12.29) before Couche-Tard’s bid was announced on Aug. 19.

Couche-Tard’s shares have fallen about 8 percent since its proposal to Seven & i was made public.

Couche-Tard previously confirmed that it submitted a “friendly” and “non-binding” proposal to the 7-Eleven operator and that it will not make further public statements “unless or until an agreement is reached.”

The Canadian convenience store operator said it hoped to achieve a “mutually agreeable transaction” that could benefit both companies’ customers, employees, franchisees, and shareholders.

According to its website, Seven & I has around 85,800 stores worldwide, including 7-Eleven shops, while Couche-Tard has more than 16,700 stores and petrol stations across 31 countries and territories.

While Seven & i is much larger than Couche-Tard in terms of sales, stores, and employees, its shares have underperformed for years, drawing complaints from investors, including ValueAct Capital, about the company’s management and asset structure.

Since last year, the Japanese retailer has announced the closure of dozens of Ito-Yokado supermarkets, exited its apparel business, and completed the sale of its Sogo & Seibu department store unit.

Reuters contributed to this report.